Andrea Perez-Sobers
Senior Reporter
andrea.perez-sobers
@guardian.co.tt
There is a silver lining for this country once it can move to the graylist where the country is monitored but not restricted, as opposed to being on the European Union blacklist.
This was revealed by Ernst and Young (EY) executive chairman Wade George, who said the graylist does not have the penalties attached, compared to the EU blacklist.
He indicated that the Government has done a great deal to accelerate its focus on this area and there is expected to be a peer review taking place on the ground in October.
During his presentation on Thursday at the T&T Chamber of Industry and Commerce’s forum on private-sector opportunities in the Special Economic Zones (SEZ), George noted the establishment of the SEZ was part of TT’s strategy for moving off the European Union blacklist.
He said T&T appeared on the official EU Blacklist of non-cooperative jurisdictions for tax purposes published in 2017.
George outlined that once this country stays on the blacklist, T&T would be less legitimate and prone to money laundering, tax evasion, and other financial crimes.
It would also be susceptible to the termination of double tax agreements, which has already happened, as Norway and Denmark have terminated their double tax agreement with TT.
Countries on the blacklist would also face tax consequences in terms of increased audits, increased withholding taxes, and non-deductibility of expenses; loss of investment, where investors are deterred and foreign and direct investment decreased, limited funding from across the EU as well as difficulty in financial transactions, as banks and financial institutions may be reluctant to process transactions involving blacklisted jurisdictions. This could lead to delays and additional costs; and reduced economic growth, as countries seem less attractive for investment.
Giving more insight into how the SEZ will operate, he said for micro-enterprises to be considered, they would have to have a minimum investment of US$10,000 (after January 31, 2022) with a sales turnover of less than $250,000 and five employees.
Small and medium-sized enterprises would have US$50,000 in investment, with a sales turnover of more than $250,000 up to $10 million and employ six-50 people, and large enterprises would have US$1 million with a sales turnover of $10 million and employ more than 50 people.
Further, George said there would be ongoing reporting requirements, including the filing required under this country’s laws including tax returns, VAT returns and annual corporate filing. Single Zone and SEZs would have to file semi-annual reports.
He added that all three entities would have to file annual operation plans and submit annual audited financial statements and data and information requested by the SEZA.